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such revenues shall st and charged accordingly. The Greek Government undertakes to have the service of the loan assured by the International Financial Commission. Subject to the obligations resulting from prior charges thereon, the revenues above mentioned shall be held and applied by the International Financial Commission for the purpose of meeting the periodical service of the loan and of making up any past defaults should they have occurred. The United States is to be under no obligation with respect to the proposed loan of $12,167,000 until the Greek Government secures the above-mentioned assurance of the service of the loan by the International Financial Commission.

6. The $12,167,000 proposed to be loaned by the United States to Greece shall be turned over in its entirely by the latter country to the Refugee Settlement Commission, to be expended by the said comsion in the carrying out of its refugee settlement work.

The funding of the existing indebtedness over a period of 62 years is in accord with the terms of our debt settlements with the other countries. The proposed settlement compares favorably with the settlements made with Italy and Yugoslavia. The present value of the payments to be received under the proposed settlement on a basis of 4 per cent per annum, payable semiannually, amounts to $6,787,000 or about 3472 per cent of the original amount due. On the same basis, the Italian settlement represents 2672 per cent, the Yugoslav settlement 33 per cent, and the Belgian settlement 49 per cent.

The proposed advance of $12,167,000 by the United States to Greece is to bear interest at the rate of 4 per cent per annum, payable semiannually, with a sinking fund sufficient to retire the whole amount in 20 years. The annual service will amount to approximately $889,500. The service of the loan is to be under the administration of the International Financial Commission and is to have as security the revenues at present under the control of the commission. For the year 1927 the estimated excess of revenues controlled by the commission over the sum required for the service of loans having prior charges amounts to the equivalent of approximately $28,000,000.

The proceeds of this loan are to be used entirely for the work of the Refugee Settlement Commission. The 1,500,000 refugees that Greece was compelled to provide for, constituted an increase in its population of more than 30 per cent. The task which the Greek Government is now facing is that of establishing the refugees in productive work, which will add, of course, to the economic strength and resources of the country. To do this requires considerable capital. In 1924 a loan of over $59,000,000 was floated in the world's financial markets for this purpose under the auspices of the League of Nations. It is provided in the fundamental articles of the Refugee Settlement Commission that the chairman of the commission shall always be an American citizen. The first chairman was Mr. Henry Morgenthau, who was succeeded by Mr. Charles P. Howland, who in turn was succeeded by the present chairman, Mr. Charles B. Eddy. Under their leadership great progress has been made, but much remains to be done to complete this great task, which is no longer in an experimental stage. It is a case of helping those who have shown determination to help themselves. It is to be noted that the rate of interest to be paid by Greece on this proposed advance for refugee settlement work is slightly in excess of the average rate now being paid by the United States on its outstanding public debt.

The settlement of the Greek debt will conclude, so far as is possible, at this time, the funding of all the war debts owed to the United States. There will remain the debts of Armenia, where there is no government in existence; of Austria, in which case Congress authorized the extension of the time for the payment of principal and interest for a period of 20 years; and of Russia, where there is no government recognized by the United States.

In considering this settlement, I called together such former members of the World War Foreign Debt Commission as were in Washington and laid the proposed settlement before them for consideration. The members present were Messrs. Kellogg, Hoover, Smoot, Burton, Crisp, and myself. All, except Mr. Crisp, agreed that the settlement should be recommended to the Congress for approval.

I suggest, therefore, if the proposed settlement meets with your approval, that it be transmitted to Congress with your recommendation that legislation be enacted authorizing the concluding of an agreement with the Greek Government on the basis of the foregoing. Faithfully yours,

A. W. MELLON,

Secretary of the Treasury. The PRESIDENT,

The White House.

DEPARTMENT OF STATE,

Washington, January 31, 1928. The SECRETARY OF THE TREASURY.

Sir: I have the honor to inclose a copy of each of the following documents:

(1) Note from the Greek minister at Washington to the Acting Secretary of State, dated January 18, 1928, setting forth the minister's understanding of the terms of the proposed plan for the settlement of the debt owed by Greece to the United States and of the differences existing between the two Governments arising out of the tripartite loan agreement entered into at Paris under date of February 10, 1918.

(2) Note from the Acting Secretary of State to the Greek minister at Washington, dated January 18, 1928, confirming the minister's understanding of the terms of the proposed plan of financial settlement between Greece and the United States.

(3) Note No. 156 of January 28, 1928 from the Greek minister at Washington to the Secretary of State informing the Secretary that the Greek Chamber of Deputies on January 27, 1928, unqualifiedly approved the proposed terms of financial settlement set forth in the notes exchanged between the Greek minister at Washington and the Acting Secretary of State on January 18, 1928.

(4) Note from the Secretary of State to the Greek minister at Washington, dated January 31, 1928, acknowledging the minister's note of January 28, 1928. I have the honor to be, sir, your obedient servant,

FRANK B. KELLOGG.

LEGATION DE CRECE,

Washington, January 18, 1928. H. E. Mr. ROBERT E. OLDS,

Acting Secretary of State, Washington, D. C. ExceLLENCY: As a result of informal conversations which I have had with representatives of the Departments of State and of the Treasury, I have the honor to set forth my understanding of the terms of the proposed plan for the settlement of the debt owed by Greece to the United States and of the differences existing between the two Governments arising out of the tripartite loan agreement entered into at Paris under date of February 10, 1918.

Under the above-mentioned agreement there were set up on the books of the United States Treasury credits in the amount of $48,236,629.05, against which the National Bank of Greece issued its notes for an equivalent amount and these were used by my Government for the payment of the costs it incurred in the prosecution of the war against the central powers.

During 1919 and 1920 cash advances in the aggregate amount of $15,000,000 were made by the United States against the credits so established, leaving a balance of established credits on the books of the Treasury in favor of my Government amounting to $33,236,629.05. The Treasury of the United States has refused to make further advances against this credit balance. As you are aware, my Government has consistently claimed that it is entitled to receive from the United States the full amount of the credit for $48,236,629.05, for which Greek obligations are at present in the possession of the United States Treasury. So convinced, indeed, has my Government been of the justice of its claim that it would have been willing at any time to propose and accept arbitration. Nevertheless, because of the pressing need to secure immediately the funds necessary to complete the refugee settlement work, my Government is willing to forego these claims. The refugee problem is vital to Greece; her future is closely bound up with her ability to care for the one and a half million men, women, and children who sought refuge within her territories in 1922 and 1923. Much has been accomplished, but much remains to be done. Without additional financial assistance the work of the Refugee Settlement Commission must come to an end in the immediate future. The work of that commission has been carried on under the chairmanship, successively, of three distinguished Americans–Mr. Henry Morgenthau, Mr. Charles P. Howland, and Mr. Charles B. Eddy. To their devoted services Greece in general and the Greek refugees in particular owe more than can well be expressed in words. It is with these thoughts in mind that the Greek Government has authorized me to state that the proposed terms set forth below are acceptable to it:

1. The $15,000,000 of principal owed by my Government to the United States with interest at 494 per cent up to December 15, 1922, and on the amount then due with interest at 3 per cent to January 1, 1928, amounting in all to $18,127,922.67, less the sum of $2,922.67 to be paid in cash upon execution of the agreement, is to be funded over a period of 62 years. There are listed below the payments to

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be made by the Greek Government to the United States under this settlement: July 1, 1928.

$20,000 Jan. 1, 1929

20, 000 July 1, i929.

25, 000 Jan. 1, 1930

25, 000 July 1, 1930.

30, 000 Jan. 1, 1931

30, 000 July 1, 1931

110, 000 Jan. 1, 1932

110, 000 July 1, 1932

130, 000 Jan. 1, 1933

130, 000 July 1, 1933, and semiannually thereafter to Jan. 1, 1938, 10 payments each of

150, 000 July 1, 1938, and semiannually thereafter to Jan. 1, 1990, 104 payments each of..

175, 000 2. The Greek Government is to forego all claims for further advances under the tripartite loan agreement dated February 10, 1918, which agreement, so far as the United States and Greece are concerned, is to be regarded as terminated.

3. The United States will advance to the Greek Government $12,167,000 at 4 per cent per annum, payable semiannually, with provisions for a sinking find to retire the loan in 20 years.

4. The Greek Government undertakes to limit the amount to be borrowed under the terms of the Greek loan protocol signed at Geneva September 15, 1927, to an amount which when added to the proposed loan from the United States of $12,167,000 will yield an effective sum equivalent to not more than £9,000,000 sterling.

5. The Greek Government will furnish as securities for the new loan described in paragraph 3 above, the revenues at present under the control of the International Financial Commission established by the law of February 26, 1898, in so far as the yield of these revenues is not required for the service of the loans having a prior charge upon the said revenues, as enumerated in Annex II to the Greek loan protocol signed at Geneva September 15, 1927. The loan described in paragraph 3 above, is to rank with and is to share the same securities as the loan approved by the Council of the League of Nations on September 15, 1927, and as set forth in the Greek loan protocol signed at Geneva, September 15, 1927. In the event of there occurring in any year a default in the payment of the service of the new loan described in paragraph 3 above, the ratio in which that loan is to share the same securities as the loan set forth in the Greek loan protocol signed at Geneva September 15, 1927, shall be the same as that which the amount of the annual service charge due the United States bears to the amount of the annual service charge due the holders of the bonds issued in accordance with the above mentioned Greek loan protocol as modified in amount by paragraph 4 above. The amounts required for the service of the loan described in paragraph 3 above, shall be and remain a charge on the revenues above mentioned, ranking immediately after such prior charges upon the said revenues as were in existence on September 14, 1927, and as enumerated in Annex II of the Greek loan protocol, signed at Geneva September 15, 1927, and the Greek Government acknowledges that such revenues shall stand charged accordingly. The Greek Government undertakes to have the service of the loan assured by the International Financial Commission. Subject to the

obligations resulting from prior charges thereon, the revenues above mentioned shall be held and applied by the International Financial Commission for the purpose of meeting the periodical service of the loan and of making up any past defaults should they have occurred. The United States is to be under no obligation with respect to the proposed loan of $12,167,000 until the Greek Government secures the above-mentioned assurance of the service of the loan by the International Financial Commission.

6. The $12,167,000 proposed to be loaned by the United States to Greece shall be turned over in its entirety by the latter country to the Refugee Settlement Commission, to be expended by the said commission in the carrying out of its refugee settlement work.

I am authorized to state that the Greek Government undertakes to submit the above terms immediately to the Chamber of Deputies with a view to securing its approval.

I shall be glad to receive your confirmation of the accuracy of my understanding of these terms.

Accept, excellency, the renewed assurance of my highest consideration.

CH. SIMOPOULOS.

DEPARTMENT OF STATE,

Washington, January 18, 1928. Mr. CHARALAMBOS SIMOPOULOS,

Minister of Greece. SIR: I have the honor to acknowledge the receipt of your note of January 18, 1928, and to confirm your understanding of the terms of the proposed plan of financial settlement between Greece and the United States reached as a result of informal conversations which you have had with representatives of the Departments of State and of the Treasury. These terms as set forth in your note under acknowledgment are as follows:

1. The $15,000,000 of principal owed by the Greek Government to the United States, with interest at 444 per cent up to December 15, 1922, and on the amount then due with interest at 3 per cent to January 1, 1928, amounting in all to $18,127,922.67, less the sum of $2,922.67 to be paid in cash upon execution of the agreement, is to be funded over a period of 62 years. There are listed below the payments to be made by the Greek Government to the United States under this settlement: July 1, 1928.

$20, 000 Jan. 1, 1929

20, 000 July 1, 1929.

25, 000 Jan. 1, 1930.

25, 000 July 1, 1930.

30, 000 Jan. 1, 1931.

30, 000 July 1, 1931

110, 000 Jan. 1, 1932.

110, 000 July 1, 1932.

130, 000 Jan. 1, 1933.

130, 000 July 1, 1933, and semiannually thereafter to Jan. 1, 1938, 10 payments each of

150, 000 July 1, 1938, and semiannually thereafter to Jan. 1, 1990, 104 payments each of...

175, 000

*

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